HMRC temporarily waives 5% late penalty fee

HMRC is giving more time to pay or to set up a payment plan for Self-Assessment because of the impact of COVID-19. Consequently, Self-assessment taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by 1 April 2021.

Under normal circumstances:

  • The payment deadline for Self-Assessment taxpayers is 31 January
  • Interest charged from 1 February on any outstanding payments
  • 5% late payment penalty is charged on any unpaid tax that is outstanding by March.

Read on to find out more about the steps HMRC has taken to support self-assessment tax payers impacted by Covid-19.

About HMRC’s Time to Pay 

You can either pay your bill or set up a payment plan to spread monthly payments until January 2022.

Tax payers can pay or set up payment plan via

The deadline is midnight on 1 April 2021, or you will incur a late payment charge.

What is the deadline to submit 2019-20 tax return? 

For the self-assessment tax payers who have still to file the 2019-20 tax bill you should file no later than 28 February to avoid being charged a £100 late filing penalty.

How to pay the tax bill in full 

You can pay online via the bank or by post. Please note the only way to stop interest accruing is to pay your bill in full.

Can you reduce your payments on account? 

Yes, if you know your 2020 to 2021 tax bill is going to be lower than the 2019-20 tax bill – for example due to the impact of COVID -19 on your business.

Finally, HMRC is warning of phishing scams and fake websites offering financial support and advise you to search ‘self assessment’ on GOV.UK